Hanwood Pastoral Co Pty Limited v Kelly

HALLEY J: Introduction 1 On 21 July 2022, I delivered a judgment in the substantive proceeding dismissing the further amended originating process filed by the plaintiff (Hanwood): Hanwood Pastoral Co Pty Limited v Kelly (No 2) [2022] FCA 850 (J). These reasons for judgment should be read in conjunction with my reasons in J, particularly with respect to the factual and procedural background. 2 The first defendant (Mr Kelly), has been a self-represented litigant since at least 11 June 2021. Although he was ultimately successful in the proceedings, four interlocutory costs orders were made against him (Four Costs Orders). The Four Costs Orders concerned Hanwood's costs of the case management hearings on 6 November 2020 and 19 November 2021, the costs thrown away by the vacation of the hearing of the strike out application on 11 June 2021, on an indemnity basis, and Mr Kelly's application to reopen his case after the exchange of closing written submissions. 3 The orders that I made on 21 July 2022 provided that, subject to any consent position that they might reach, the parties were to file and serve a copy of the proposed fixed sum costs orders (also known as lump sum costs orders) with respect to the Four Costs Orders, together with an outline of written submissions and any evidence by way of affidavit in support of the fixed sum orders sought. The orders also provided for fixed sum costs orders to be determined on the papers. I note that throughout these reasons I have referred to the orders as "fixed sum costs orders" rather than the perhaps more generally used term "lump sum costs orders". 4 Hanwood seeks fixed sum costs orders in the amounts of: (a) $2,603 for Hanwood's professional costs of the case management hearing on 6 November 2020; (b) $26,546 for Hanwood's professional costs of the case management hearing on 19 November 2021 and Mr Kelly's application to reopen his case after the exchange of closing written submissions; and (c) $11,903 for the professional costs thrown away by the vacation of the hearing of the strike out application on 11 June 2021. 5 In addition to the professional costs outlined above, Hanwood seeks: (a) $500 for internal disbursements that it claims for items "such as printing, copying, postage and sundries"; and (b) $1,930 for Court fees rendered on 30 November 2021 for the listing on 3 December 2021. 6 Hanwood relies on an affidavit of Mr David Farrar, the Solicitor Director of Farrar Lawyers Pty Ltd, the solicitor for Hanwood, sworn on 18 August 2022 (August 2022 Affidavit) in support of the fixed sum costs order that it seeks in the proceedings. Hanwood claims an additional fixed sum costs order of $3,000 for the work done to prepare the August 2020 Affidavit, the exhibits to the affidavit and submissions in support of the fixed sum costs orders. 7 Mr Kelly did not file any submissions, nor proposed fixed sum costs orders. Rather, he sought to rely on an affidavit that he swore on 24 August 2022 in apparent opposition to the making of any costs orders against him, and a without prejudice offer that he made to Hanwood on 12 August 2022. Mr Kelly foreshadowed a number of additional matters relating to the costs of the proceedings in his affidavit. In order to formalise the resolution of these matters, I directed that the parties attend a case management hearing on 9 September 2022. 8 At the case management hearing on 9 September 2022, I made orders for the filing and service of submissions and supporting evidence with respect to Mr Kelly's oral application at the case management hearing (September 2022 Application) for the Court to make orders that: (a) Hanwood pay Mr Kelly's costs of the proceedings; (b) the costs the subject of the Four Costs Orders made in the proceedings be paid to Hanwood; (c) the Four Costs Orders made in the proceedings be set aside; (d) the moneys paid into the trust account of the solicitor for Hanwood pursuant to Order 2 of the orders made by Rares J on 7 July 2020 be paid to Hanwood; and (e) any moneys paid by way of settlement of the proceedings against the former second to fifth defendants at the mediation be paid to Hanwood. 9 Mr Kelly did not file any submissions in support of the orders that he sought in the September 2022 Application, but did file an affidavit that he swore on 12 October 2022 which contained both evidence and submissions (October 2022 Affidavit). I have proceeded on the basis that the October 2022 Affidavit contains Mr Kelly's submissions in support of the September 2022 Application. 10 Hanwood filed submissions and an affidavit from its solicitor, Mr Farrar, sworn on 11 November 2022, in response to the October 2022 Affidavit. Mr Farrar provided a detailed chronology of the principal steps in the proceedings and the conduct of Mr Kelly in his defence of the causes of action advanced by Hanwood. 11 For the reasons that follow, I am satisfied that I should make fixed sum costs orders in the amounts sought by Hanwood, subject to certain reductions which I explain below, and that I should make a qualified order that Hanwood pay Mr Kelly's costs of the proceedings. I otherwise dismiss the September 2022 Application.

The application by Hanwood for fixed sum costs orders

Legal principles 12 The Court has a broad discretion to make fixed sum costs orders pursuant to r 40.02 of the Federal Court Rules 2011 (Cth) (Rules). The approach that the Court will generally take to a fixed sum costs order is outlined in the Costs Practice Note (GPN-COSTS) issued on 25 October 2016 (Practice Note). The Court's preference, as stated in the Practice Note at [4.1] is that fixed sum costs orders be made whenever it is practicable and appropriate to do so. 13 The approach to making a fixed sum costs order should be "logical, fair and reasonable": Playcorp Group of Companies Pty Ltd v Peter Bodum A/S (No 2) [2010] FCA 455 at [5] (Middleton J) citing Beach Petroleum NL and Another v Johnson and Others (No 2) (1995) 57 FCR 119; 120, 123 and 124 (von Doussa J). The object of the fixed sum costs orders procedure is to "save the parties the time, trouble, delay, expense and aggravation in having a taxation proceed on a matter": Keen v Telstra Corporation Limited (No 2) [2006] FCA 930 at [4] (Rares J).

Mr Farrar's affidavit and exhibits 14 Mr Farrar annexes to his August 2022 Affidavit summaries of the fees for professional services that he states were provided by him to Hanwood that were of or incidental to the Four Costs Orders. The summaries are prepared in a form more relevant to a taxation rather than a fixed sum costs order. They identify the date on which work was undertaken, a short description of the work performed, the time taken to undertake the work in 6 minute intervals, the fee claimed for each piece of work and the relevant rule in Schedule 3 to the Rules relied upon to claim those amounts. 15 Typically, the evidence relied upon for a fixed sum costs order is a general description of the work undertaken, the identity and hourly rates of the lawyers providing the work, the aggregate amount charged for each lawyer, in the absence of a special costs order, the discount applied to reduce the professional fees claimed to party and party costs together with a listing of all disbursements incurred, including counsels' fees and expert witnesses' fees. 16 Given the approach adopted by Hanwood, I have concluded that the appropriate methodology, consistently with the objectives of the fixed sum procedure provided for by the Rules, is to focus on the description of the work claimed, the dates upon which work was performed and the time incurred in undertaking that work. I do not consider it appropriate to approach the summaries on the basis of a formal taxation of costs. By way of example, I have not attempted to count folios of words in documents drafted or reviewed to determine whether the fixed amounts sought would be permitted on a taxation. 17 I have concluded that it is not necessary to apply any discount to the professional costs claimed to convert actual costs charged to party and party costs. I have reached this conclusion as the summaries have been prepared having regard to what might be expected to be recovered on a taxation on a party and party basis by including the amounts permitted in Schedule 3 to the Rules for particular categories of work, rather than by relying on hourly rates for professional services. 18 I am satisfied that, given the extent of the information provided in the summaries, the approach I have outline above is a logical, fair and reasonable approach to determine fixed sum costs orders.

6 November 2020 Case Management Hearing 19 The first tab to the exhibit annexed to Mr Farrar's August 2022 Affidavit contained a listing of the professional fees incurred by Hanwood with respect to the 6 November 2021 Case Management Hearing. The costs listed in the schedule were incurred between 4 November 2021 and 6 November 2020, other than an amount of $36.00 for considering an email from the Associate to Rares J on 9 November 2020 confirming that orders had been made. 20 I am satisfied from the descriptions of the work, the dates it was undertaken and the amounts claimed by reference to the scales in Schedule 3 to the Rules, that a fixed sum costs order should be made in the amount claimed of $2,603 for the professional fees incurred by Hanwood with respect to the 6 November 2020 Case Management Hearing.

19 November 2021 Case Management Hearing and Application to Reopen Case 21 The second tab to the exhibit annexed to Mr Farrar's August 2022 Affidavit contained a listing of the professional fees incurred by Hanwood with respect to the case management hearing on 19 November 2021 and Mr Kelly's application to reopen his case after the exchange of closing written submissions (second schedule). The aggregate amount sought in the second schedule is $24,116. 22 The costs listed in the second schedule were incurred between 9 November 2021 and 29 March 2022. Mr Kelly first notified the Court and Hanwood that he intended to make an application to reopen his case on 9 November 2021. 23 Subject to the following deductions, I am satisfied from the descriptions of the work, the dates that it was undertaken and the amounts claimed by reference to the scales in Schedule 3 to the Rules, that the amounts claimed in the second schedule should be included in a fixed sum costs order for the professional fees incurred by Hanwood with respect to the case management hearing held on 19 November 2021 and Mr Kelly's application to reopen his case after the exchange of closing written submissions. 24 First, irrespective of the application by Mr Kelly to reopen his case, a hearing would have been listed on 3 December 2021 for the purpose of hearing final oral closing submissions. The hearing on 3 December 2021 commenced at 10.15 am and concluded at 12.39 pm. Cross-examination and consideration of other issues relating to the additional evidence arising from Mr Kelly's application to reopen his case took place from 10.15 am to 11.20 am. The balance of the hearing was devoted to final oral closing submissions. The parties were given leave to file supplementary written submissions addressing any issues that had arisen by reason of the additional evidence. 25 Given that the time devoted to final oral closing submissions was approximately equal to the time devoted to the additional evidence on 3 December 2021, the amounts claimed in the second schedule for the hearing on 3 December 2021 should be reduced by 50%. Hence, the amounts sought to be included in the fixed sum costs order in the second schedule for 3 December 2021 will be reduced by 50% from $3,575 to $1,788 (rounded up). 26 I have also considered whether it might be necessary to make a similar deduction for the work undertaken on 2 December 2021 for preparation for the hearing on 3 December 2021. The description of the work undertaken on 2 December 2021 was in these terms: All day preparation for further hearing involving potential cross examination of Ms Crieghton, Ms Bupan, Mr Nicols and Mr Staines and examination of Hanwood's witnesses. 27 It would appear from that description of the work undertaken on 2 December 2021 that no material additional preparation for final closing oral submission was undertaken on that day. I therefore do not consider that I have any logical, fair and reasonable basis to discount the amount claimed on 2 December 2021. 28 Second, the second schedule includes a claim for work done on 11 February 2022 with this description: Updating file - attending to updating file including client documents, collating filing into chronological order, updating chronology, schedule indexes. 29 Given that the last communication from Mr Kelly about the status of his supplementary written submissions was received on 4 February 2022 and no further submissions were required from Hanwood, I do not accept that this amount of $33, albeit relatively insignificant, claimed for this work should be included in the fixed sum costs order. 30 Hanwood seeks, in addition to the professional costs identified in the second schedule, an amount of $1,930 for court fees for the listing on 3 December 2021 and $500 for internal disbursements such as printing, copying, postage and sundries. I do not accept that the amount of $1,930 for Court fees for the listing on 3 December 2021 should be included in the fixed sum costs order for the costs incurred by reason of Mr Kelly's reopening of his case. It had become necessary to list the matter for a further hearing for the purpose of final oral submissions before Mr Kelly applied to re-open his case. 31 I am otherwise not satisfied that I have been provided with sufficient evidence, even in the context of a fixed sum costs order, to conclude that the whole of the amount claimed of $500 for "internal disbursements" relates to the professional fees incurred by Hanwood with respect to the case management hearing on 19 November 2021 and Mr Kelly's application to reopen his case after the exchange of closing written submissions. I am satisfied, however, that not insignificant "internal disbursements" would have been incurred in relation to those matters. Despite the paucity of evidence, I propose to make a deduction of 50%, being $250, in the amounts clamed for internal disbursements. 32 A fixed sum cost order in the amount of $22,579 ($24,116 -$1,787 + $250) should therefore be made for the professional fees incurred by Hanwood with respect to the case management hearing held on 19 November 2021 and Mr Kelly's application to reopen his case after the exchange of closing written submissions.

Vacation of the hearing on 11 June 2021 33 The third tab to the exhibit to Mr Farrar's affidavit contained a listing of the professional fees incurred by Hanwood with respect to professional costs thrown away by the vacation of the hearing of the strike out application on 11 June 2021 (third schedule). The aggregate amount sought in the third schedule is $11,903. 34 The costs listed in the third schedule were incurred between 6 May 2021 and 12 June 2021. They appear to include all costs incurred by Hanwood with respect to the strike out application up to and including 12 June 2021. The costs order, however, was only directed at the costs of and incidental to the interlocutory hearing on 11 June 2021, that is the "costs thrown away" by the vacation of the hearing of the strike out application on 11 June 2021. 35 A "costs thrown away" order focuses attention on costs that have been incurred for work done that is wasted because of a vacation or adjournment of a hearing. It does not carry with it any implication that all work done in relation to a matter up to the time of the vacation or adjournment is wasted. Work undertaken in preparing evidence and submissions might not be "thrown away" in that it would not necessarily need to be redone at any subsequent hearing of the application or proceeding. On the other hand, it may be the case that submissions and evidence in the context of an interlocutory application might need to be significantly revised or updated when the application was ultimately heard. 36 The strike out application in this proceeding did not ultimately proceed for the reasons explained in J at [68]-[80]. That it did not ultimately proceed, however, does not have the consequence that all work undertaken in relation to the application can be construed as "costs thrown away" for the purposes of the costs order. 37 In order to take account of the considerations outlined above, I have approached the costs claimed in schedule three on the basis that: (a) all costs incurred with respect to communications with my Associate in the period leading up to the proposed hearing on 11 June 2021, updating interest calculations, attendance at Court on 11 June 2021 and communications with and reporting to Mr Renton on 11 and 12 June 2021 will be allowed in full (in aggregate an amount of $3585); and (b) 50% of the work undertaken in relation to the drafting of submissions and related work on 9 and 10 June 2021 will be allowed (in aggregate $4,030 reduced to $2,015) on the basis that this work was not "thrown away" in its entirety as it would not all need to be redone for the purposes of a subsequent hearing of the strike out application. 38 I am satisfied from the descriptions of the work undertaken and the amounts claimed by reference to the scales in Schedule 3 to the Rules, that the amounts claimed in the third schedule, and the discounts that I have identified above, that a fixed sum costs order should be made in an amount of $5,600 ($3,585 + $2,015) for the professional costs incurred by Hanwood that were thrown away by the vacation of the hearing of the strike out application on 11 June 2021.

Supplementary claim for costs of the costs application 39 No explanation is advanced by Hanwood as to why I should make any fixed sum costs order or any other order in relation to the costs that might have been incurred by Hanwood in advancing submissions and evidence in support of the fixed sum costs orders that it seeks. No order will be made in relation to these costs.

Principles 40 Section 43 of the Federal Court of Australia Act 1976 (Cth) confers a broad discretion on the Court to award costs in all proceedings. Subject to certain limited exceptions, generally linked to disentitling conduct on the part of the successful party, a successful party is entitled to an award of costs: Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61 at [303] (Bennett, Besanko and Beach JJ) citing Oshlack v Richmond River Council (1998) 193 CLR 72 (Oshlack) at [67] -[68] (McHugh J, in dissent but not in this aspect of the principle and with which Brennan CJ agreed). 41 In Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256; (2011) 288 ALR 385 at [97] - [98] (Campbell JA with whom Macfarlan and Young JJA agreed) accepted as a non-exhaustive statement of the circumstances in which a Court may depart from the usual rule that a successful party is entitled to their costs the following statement by McHugh J in Oshlack at [69] (with Campbell JA noting that McHugh was in dissent, but not in terms that was contradicted by any statements in the joint judgment of Gaudron and Gummow JJ or in the judgment of Kirby J, where all three made up the majority): [69] In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 at 874, Devlin J formulated the relevant principle as follows: "No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct." "Misconduct" in this context means misconduct relating to the litigation: King & Co v Gillard & Co [1905] 2 Ch 7; Donald Campbell & Co Ltd v Pollak [1927] AC 732 at 812, or the circumstances leading up to the litigation: Bostock v Ramsey Urban District Council [1900] 2 QB 616. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation: Jones v McKie [1964] 1 WLR 960; [1964] 2 All ER 842; Bostock [1900] 2 QB 616 at 622, 625 and 627; unnecessarily protracts the proceedings: Forbes v Samuel [1913] 3 KB 706; succeeds on a point not argued before a lower court: Armstrong v Boulton [1990] VR 215 at 223; prosecutes the matter solely for the purpose of increasing the costs recoverable: Hobbs v Marlowe [1978] AC 16; [1977] 2 All ER 241; or obtains relief which the unsuccessful party had already offered in settlement of the dispute: Jenkins v Hope [1896] 1 Ch 278. 42 Disentitling conduct has been held to include any conduct "calculated to occasion unnecessary expense": Keddie v Foxall [1955] VLR 320 at 323-324 (Lowe, Martin and O'Bryan JJ); Lollis v Loulatzis (No 2) [2008] VSC 35 at [29] (Kaye J); nor need it be "a most exceptional case, or a strong or exceptional case": G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263 at [20] (Bryson JA with Hodgson JA agreeing at [1] and Santow JA agreeing at [2]).

Submissions 43 For present purposes, it is sufficient to record that Mr Kelly seeks his costs of the proceedings on the basis that the claims advanced by Hanwood have been dismissed by the Court. The submissions advanced by Mr Kelly in his affidavit are principally directed at: (a) the Four Costs Orders that have been made that are the subject of the fixed sum costs applications by Hanwood; and (b) a complaint that he is not entitled to recover his personal costs for the in excess of 350 hours he has devoted to his defence of the proceedings because of an "advised ruling that a self-represented person, an Australian Citizen, is not entitled to claim any amount for time" representing themselves. 44 Hanwood submits by reference to the detailed chronology of procedural steps taken or not taken by Mr Kelly in the proceeding that Mr Kelly: (a) allowed the Plaintiff to be administratively deregistered by ASIC. (b) was not required at any time prior to the grant of leave under section 237 of the Act to involve himself in Proceedings where he was not a named party. (c) has consistently used the Email Address but chose to selectively respond to communications sent to him as and when he determined it to be appropriate. (d) avoided service of orders and documents which required the making of substituted service orders and the service of documents at the Email Address; (e) only responded to communications that were sent to his Email Address after orders were made for substituted service. (f) despite filing an appearance, and ostensibly agitating a position, did not appear at Court on 2 March 2020 when leave was granted. (g) did not response to [the interlocutory application filed on 18 June 2020seeking default judgment against him] and chose not to attend Court on 7 July 2020 when the [interlocutory application] was heard and orders were made against him. (h) filed [an interlocutory application on 23 July 2020 seeking to set aside the default judgment ordered against him] and did not provide any explanation for his failure to attend Court on 7 July 2020. (i) as a condition of the setting aside of the default judgment was required to give continuous financial disclosure and pay the $27,500 cost order. He did not do so and did not provide any credible explanation for this failure. (j) did not provide discovery as ordered by the Court, and when he did provide discovery, very limited information was given with no records which disclosed the underlying basis for the substantial payments to Stintari. (k) rarely, if ever, complied with the Court ordered timetables. (l) produced documents, including statements and affidavits, during the final hearing and after judgment had been reserved which would have influenced the Plaintiff in terms of the strength of its claim against the First Defendant. (m) was contradictory in his written and oral evidence and was unnecessarily combative. (n) invited the litigation by not responding to reasonable requests for information and giving explanations for the disbursement of substantial sums of the Plaintiff's money. (o) unnecessarily protracted the Proceedings. 45 Hanwood submits that the matters identified above are sufficient to constitute disentitling conduct on the part of Mr Kelly such that, although he was ultimately successful, he is not entitled to a costs order in his favour. 46 Hanwood further submits that if the Court, contrary to its primary submission, accepts that Mr Kelly is entitled to a costs order in his favour, the costs order should be limited to Mr Kelly's taxed costs during the period in which he was a party to the proceedings and legally represented.

Consideration 47 The determination of whether conduct of an otherwise successful party is sufficient to disentitle them to an order for costs in their favour is an evaluative and impressionistic task. As set out above, it will not be necessary to establish that the conduct constitutes a "most exceptional case, or a strong or exceptional case". Analysed as whole and in context, however, the conduct must be sufficiently objectionable such that the usual order as to costs should not be made. 48 I note further that the conduct of a successful defendant, not having themselves invoked the Court's jurisdiction, may be more difficult to characterise as disentitling conduct. A defendant may be ill-resourced and, at times, overwhelmed by the formality of legal proceedings and their potential financial and emotional impact if unsuccessful. Accordingly, a defendant may not at all times act in a manner that might be expected from a model litigant. 49 Hanwood relied on a number of acts and omissions by Mr Kelly to establish that Mr Kelly engaged in conduct that did not assist the orderly or efficient progression of the proceedings. In particular, Hanwood cited Mr Kelly's delays in providing relevant documents, his failure to attend case management hearings or comply with Court timetables, his engagement in combative correspondence and an unfortunate tendency to make personal and gratuitous attacks on Mr Farrar. 50 I am satisfied, however, that much of Mr Kelly's conduct can be attributed to his ongoing and serious medical conditions, his poor hearing, an inability to locate relevant historical records of Hanwood, the unavailability or limited availability of relevant witnesses, his limited financial resources, his profound difficulties in effectively and objectively defending the proceedings as a self-represented litigant in the period from June 2021 and, perhaps most significantly, the ongoing impact of lockdown and other restrictive measures imposed in response to the COVID-19 pandemic. These measures had a particularly profound effect on Mr Kelly because of his hearing difficulties, which precluded him from being able to effectively utilise telephone and video-link communications. 51 When due allowance is made for these matters, I am not persuaded that Mr Kelly, by any "lax conduct", effectively "invited" the litigation, unnecessarily protracted the proceedings nor defended the matter solely for the purpose of increasing the costs recoverable. 52 It is also necessary to take into account that on the four occasions on which the Court has concluded that acts or omissions of Mr Kelly have given rise to costs thrown away or costs that have been unnecessarily incurred, Mr Kelly has been ordered to pay costs. 53 In all the circumstances, I am not persuaded that the acts and omissions of Mr Kelly relied upon by Hanwood are sufficient to constitute conduct that would disentitle Mr Kelly, as an ultimately successful party, to a costs order in his favour. 54 Nevertheless, the costs order should exclude costs incurred by Mr Kelly in relation to the summary dismissal application and his application to set aside the summary dismissal of the proceedings before Rares J, as his Honour made costs orders against Mr Kelly on both applications. 55 Further, the costs order should be limited to legal professional costs incurred by Mr Kelly during periods in which he was both a party to the proceedings and legally represented in the proceedings and to disbursements during periods in which he was a party to the proceedings that would, in the usual course, be recoverable on a taxation. 56 In order to avoid the costs of a formal taxation, the costs payable to Mr Kelly are to be determined by a Registrar of the Court on a fixed sum basis.

Should the costs that are the subject of the Four Costs Orders be paid to Hanwood? 57 Mr Kelly submits that the costs that are the subject of the Four Costs Orders should be paid to Hanwood. 58 Hanwood contends that the Court should make an order that the costs that are the subject of the Four Costs Orders should be paid to Mr Renton and Dinomyte Pty Ltd (Dinomyte) as they were the parties that solely funded the proceedings. 59 The Court has the power pursuant to s 242 of the Corporations Act 2001 (Cth) (Act) to make a costs order in favour of a person who was granted leave to bring proceedings under s 237 of the Act on behalf of a company. 60 On 2 March 2020, Dinomyte and Mr Renton were granted leave to conduct these proceedings on behalf of Hanwood. 61 Since the commencement of these proceedings, Mr Farrar gives evidence in his affidavit sworn on 11 November 2022, that I accept, that all legal costs and disbursements incurred by Hanwood in connection with the proceedings have been rendered to and paid by Dinomyte and Mr Renton. 62 Given that all legal costs and disbursements that have been incurred by Hanwood in the proceedings have been paid by Dinomyte and Mr Renton, I have concluded that it is appropriate that orders should be made pursuant to s 242 of the Act that the costs that are the subject of the Four Costs Orders are to be paid to Dinomyte and Mr Renton.

Should the costs that are the subject of the Four Costs Orders be set aside? 63 As the obligation of Mr Kelly has already been established, it is only the quantum of those costs on a fixed sum basis that need to be determined. Mr Kelly has not appealed nor sought leave to appeal any of the Four Costs Orders. 64 Nevertheless, Mr Kelly now seeks orders that each of the Four Costs Orders should be set aside. 65 Mr Kelly seeks to rely on the following diverse range of considerations to support his application that the Four Costs Orders should now be set aside: (a) his company Stintari Pty Ltd (Stintari) and he are still owed in excess of $1,100,000 from Hanwood given the shortfall in the sale proceeds of Hanwood's Hunter Valley property in early 2015; (b) his health circumstances and government restrictions arising out of the COVID-19 pandemic made it difficult for him to deal with matters promptly and efficiently; (c) his restricted access to finance precluded him from complying with Court orders; (d) settlement offers were made at a mediation in an amount of $120,000 to settle the proceedings and, more recently, in an amount of $4,500, with respect to the Four Costs Orders; and (e) natural justice and procedural fairness entitlements for all Australian citizens. 66 On the assumption that I still have the jurisdiction to set aside the Four Costs Orders, each of which has been entered, I am not persuaded that any of the considerations raised by Mr Kelly, either individually or cumulatively, would cause me to set aside any of the Four Costs Orders. 67 First, any amounts alleged to be remaining outstanding from Hanwood to Stintari and Mr Kelly cannot be set off against amounts payable to Dinomyte and Mr Renton in connection with their funding of the proceedings and are otherwise irrelevant. 68 Second, Mr Kelly's health circumstances, COVID-19 restrictions and his inability to access finance have been taken into account with respect to the costs of the proceedings generally, but do not provide a sufficient evidentiary basis nor a reason to set aside any of the Four Costs Orders. The costs orders were made against Mr Kelly because the Court had concluded in specific contexts and occasions that Mr Kelly, by his acts or omissions, had caused the incurring of additional unnecessary costs by reason of unsuccessful applications, vacations of a hearing date for a strike out application and as the price for re-opening his case after the close of evidence. Mr Kelly has not demonstrated how, in respect of each of these occasions, a different order for costs should have been made. 69 Third, the settlement offer with respect to the resolution of the proceedings as a whole may have been relevant if Hanwood had been successful, but for an amount less than the settlement offer it is not relevant, however, to any application to set aside the Four Costs Orders. 70 The settlement offer made by email to Hanwood on 12 August 2022 was for a payment of $4,500 by bank cheque expressed to be "in full and final settlement of all costs mattes whatsoever" in relation to the proceedings. It was an offer for an amount substantially less than the amounts sought by Hanwood in its proposed costs orders and substantially less than the quantum of the fixed sum costs orders that I have determined should be made. 71 Nor is the $4,500 settlement offer with respect to the Four Costs Orders relevant, given the fixed sum costs orders that I have determined for the Four Costs Orders, in aggregate, are substantially in excess of that amount. 72 Fourth, any general appeal to natural justice and procedural fairness considerations divorced from any specific identification of any departure from or conduct inconsistent with those considerations does not relevantly advance any basis that might justify the setting aside of the Four Costs Orders.

Should the money paid into Mr Farrar's trust account pursuant to the 7 July 2020 order of the Court be paid to Hanwood? 73 Mr Kelly seeks an order that the amount of $27,500 that was paid into Mr Farrar's trust account in satisfaction of the order made by Rares J on 7 July 2020, that Mr Kelly pay Hanwood's costs of the application for default judgment, be paid to Hanwood. 74 Mr Kelly submits that because the default judgment was set aside by Rares J on 21 August 2020, the order made on 7 July 2020 that he pay Hanwood's costs of the application for default judgment and then ordered on 21 August 2020 to be determined in a fixed sum amount, should also be set aside. The costs were subsequently fixed in the sum of $27,500. Mr Kelly therefore submits that $27,500 he paid into Mr Farrar's trust account to satisfy the costs order should be paid to Hanwood. 75 Mr Kelly has not sought leave to appeal or appealed the costs orders that Rares J made on 7 July 2020 and 21 August 2020. Nor has he advanced any plausible legal or evidentiary basis on which they should now be set aside. 76 It does not follow, contrary to the position advanced by Mr Kelly, that the decision to set aside the default judgment carries with it any necessary conclusion that the costs order should also have been set aside. The orders made on 21 August 2020 by Rares J, setting aside the default judgment, were made on the basis of an undertaking from Mr Kelly that he would not reduce his current equity or otherwise dispose of nay real or personal property except to the extent necessary to meet reasonable medical, legal or usual and living expenses. The orders also expressly provided that Mr Kelly was to pay the costs of his application to set aside the default judgment and that both those costs and the costs of the application for default judgment were to be determined by the Court on a fixed sum basis and paid forthwith by Mr Kelly. 77 The costs order made against Mr Kelly on 7 July 2021 was made in the following context, as explained by Rares J in his reasons for judgment in Hanwood Pastoral Co Pty Limited v Kelly [2020] FCA 1020: 4 On 2 March 2020 [Gleeson J] granted leave under s 237 of the Corporations Act 2011 for the plaintiffs to file a statement of claim and amended originating application in Hanwood's name as plaintiff and listed the matter for case management. 5 In the event, on 6 April 2020 her Honour ordered that Hanwood be permitted to serve Mr Kelly with the amended originating process and statement of claim, both dated 6 March 2020, together with her Honour's orders made on 2 March 2020 by sending those documents to Mr Kelly at the email address of his former partner in an accounting firm, Terence Staines, and Mr Kelly's email address by 5pm on 6 April 2020. Her Honour ordered, that pursuant to r 10.24(c) of the Federal Court Rules 2011, that the documents would be taken to have been served personally on Mr Kelly upon transmission to each of those email addresses. 6 I am satisfied by the affidavit of Danielle Francis, sworn on 14 April 2020, that she served Mr Kelly in accordance with those orders by transmitting emails that she sent at 11.58am and 11.59am respectively on 6 April 2020 to the two email addresses referred to in her Honour's orders to which she had attached each of the documents to which her Honour referred in those orders, as well as the orders made on 6 April 2020. 7 Since then Mr Kelly has not filed an address for service as r 5.02 required him to do, nor did he appear at the subsequent case management hearing on 28 May 2020 before her Honour or today. 8 On 28 May 2020 her Honour ordered that Hanwood have leave to serve any application for judgment in default of appearance by Mr Kelly, together with affidavits in support by 18 June 2020. The orders provided that he could be served with the application and evidence at the two email addresses above by 19 June 2020 and that the documents would be deemed to have been personally served on Mr Kelly upon transmission to those email addresses pursuant to r 10.24(c). The application was fixed for hearing today. 9 On 19 June 2020, in accordance with the orders of 28 May 2020, Ms Francis sent to Mr Kelly's specified email address the application dated 18 June 2020 and Mr Renton's unsworn affidavit in support dated 18 June 2020, together with a link to the exhibit to that affidavit. I am satisfied that this brought the current application to Mr Kelly's attention by way of service on him. 78 Had Mr Kelly entered an appearance prior to the hearing of the application for default judgment, the costs incurred by Hanwood in connection with that application would not have been incurred. 79 Mr Kelly unsuccessfully made two informal applications for an adjournment of the hearing of the application for default judgment on medical grounds but these were not acceded to by Rares J. His Honour concluded at [18] that: Clearly, the medical certificate is and has been, since mid-May 2020, out of date. There is no evidence of any kind, let alone on affidavit, to support the granting of an adjournment of the hearing today of which Mr Kelly has been well aware and I refuse to do so.

Should the settlement money paid at the mediation be paid to Hanwood? 80 The fifth contention advanced by Mr Kelly in the September 2022 Application is that the money paid at the mediation in late 2021 by the former second to fifth defendants in settlement of the proceedings against them should now be paid to Hanwood. 81 Mr Kelly, however, does not advance any submissions that appear to be specifically addressed to that contention. In the absence of any evidentiary basis or articulation of why such an order should be made it is not possible to make any determination as to whether such an order can or should now be made. There is no evidence before the Court as to the basis on which any settlement amount was paid, to whom it was specifically paid and how any payment my subsequently have been disbursed.

Disposition 82 Fixed sum costs order will be made in the amounts that I have determined for each of the Four Costs Orders in favour of Dinomyte and Mr Renton. 83 A costs order is to be made in favour of Mr Kelly limited to legal professional costs that he has incurred in periods in which he was a party to the proceedings and legally represented and excluding any legal professional costs incurred in connection with the matters the subject of the Four Costs Orders, the application by the plaintiff for summary judgment that was determined by Rares J and the first defendant's subsequent application to set aside the summary judgment. 84 The costs order is also to extend to disbursements recoverable on a taxation that he has incurred in periods that he was a party to the proceedings, other than disbursements that he has incurred in connection with the matters the subject of the Four Costs Orders, the application by the plaintiff for summary judgment that was determined by Rares J and the first defendant's subsequent application to set aside the summary judgment. 85 The quantum of the costs order in favour of Mr Kelly is to be determined on a fixed sum basis by a Registrar of the Court. 86 The September 2022 Application will otherwise be dismissed. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley.